How Technology Is Redefining Insurance And CX

At present, billions of dollars are being invested each year in InsurTech startups, yet some in the insurance industry are still not really 100% sure what InsurTech really means. Let’s set the record straight and ensure that it’s clear. InsurTech describes the many different types of new technologies that are disrupting the insurance industry. It’s not just a single technology or product; rather it is a broad collection of innovations that are redefining how insurance will work in 2019.

It’s easy to see some examples, because they are now all around:

·      Telematics; the discount you get from your vehicle insurer because you agree to install a telematic device that can monitor how and when you drive.

·      Health tracking; the free or discounted gym membership you get by agreeing to allow your health insurance company monitor your physical activity using a wearable device.

·      Peer-to-peer insurance; the creation of P2P markets where individual investors can enter the insurance market and cover the risk of home contents or private liability insurance.

Is all this technology a threat to traditional insurance companies? It really depends. Consider the example of Lemonade, an online and app-based home contents insurance company. They shout loudest about their extremely quick decisions on claims, claiming to be redefining the market through the use of Artificial Intelligence (AI) that can help them to decide claims almost instantly. By instantly I really do mean instantly – when you file a claim on Lemonade they will usually give you the answer within seconds.

So I would argue that what all these new technologies are really doing is allowing the insurance industry to build products that are much closer to what the customer really wants and needs. It is not just the technology that is changing the industry; it is this ability to become more customer-centric than ever before.

As this article on InsurTech suggests, insurance companies really need to understand their customer journey and the location of any pain points. In this industry it is the quote and claim that require the most management. Lemonade has already demonstrated that if you can build intelligent enough systems then claims can become painless, but what about the process of asking for an insurance quote?

Most companies still require a huge amount of information in order to price risk accurately, but if you can turn the problem around and ask, what do I know about this customer? Can I determine or estimate some variables based on additional data sources, such as social media use?

Any insurance company that can make the quote and claim process smooth and simple will attract more customers – it’s that easy. The technologies entering insurance today can help, but most of the answers will come just by taking a customer-centric approach to the quote and claim processes. Put yourself in the shoes of your customer and consider how you can improve these two important processes – even if you need to start changing the rules.

Please feel free to share your thoughts, comments, and perspectives!!